Last year, Congress passed the Tax Cuts and Jobs Act—one of the largest reforms to the U.S. tax code in many years. This will be the first tax year that changes take effect, and many nonprofit organizations have wondered about the impact of tax reform on charitable giving.

One tax rule change is an increase in the standard deduction for individuals and families. A married couple filing jointly, for example, will be able to claim a standard deduction of $24,000, whereas the prior standard deduction was $13,000. For many taxpayers, this increased standard deduction will negate the need to itemize deductions.

Will this mean a decline in charitable giving in future years?

Based on available research reports, we think the impact of tax reform on charitable giving will actually be positive. Here are four reasons why we believe contributions will increase:

Charitable giving has been in a significant uptrend for four years.

Total charitable giving has risen since 1977, with two notable exceptions, several years following the 2000 “Dotcom Bust” and a few years following the 2008 “Great Recession”. According to the Giving USA 2018 Survey, total giving reached $410 billion in 2017—a new all-time high and the fourth year in a row of achieving record new highs.

Tax reform leaves corporations with more to give.

The top corporate tax rate for U.S. companies was lowered from 35% to a flat rate of 21% for all businesses. This is a significant reduction that will be positive for the nonprofit industry:

Corporations will have more earnings to earmark for charitable giving programs and more marketing funds to partner with charitable organizations.

Higher profits also leave more room in corporate budgets for employee salary increases, which in turn, may boost individual giving to charities.

Donors give from their hearts, not their tax returns.

The National Development Institute conducted a survey of major donors to determine why they give to charities and how nonprofits can better engage donors. They developed a list of donor motivations, ranging from respect to recognition to belief in mission.

What didn’t make the list? Tax write-offs. Whether donors do or do not itemize charitable contributions, the survey showed they give from their hearts.

The economy matters most for charitable giving.

Whether you’re talking about corporate giving, individual donations, or foundation payouts, what matters most in charitable giving trends is the economy. Right now, the U.S. economy is growing and showing many signs of strength, from low unemployment to higher corporate profits. Better corporate earnings, higher salaries, and a strong stock market continue to support charitable giving.

Nonprofits can support increased giving by sharing their missions with donors effectively, presenting powerful stories that leave no doubt about the impact made by each contribution. Nonprofit finance executives can strengthen these stories by leveraging modern financial management solutions to increase transparency and accountability to donors.